Question 1

Household production consists of households producing goods and services,like meals,cleaning and child care,instead of firms.

Accepted Answer

A) True 
 B)False

Question 2

Taxes collected on the basis of the benefits-received principle:

Accepted Answer

A) provide states with their main sources of revenue. 
B) tend to redistribute income from rich to poor. 
C) collect the same total amount from each individual. 
D) connect the revenue side of the budget with the spending side of the budget. 
E) make it possible for government to spend money on activities that markets can't provide. 
A) provide states with their main sources of revenue. 
B) tend to redistribute income from rich to poor. 
C) collect the same total amount from each individual. 
D) connect the revenue side of the budget with the spending side of the budget. 
E) make it possible for government to spend money on activities that markets can't provide.

Question 3

The statement "Households maximize utility" means that households:

Accepted Answer

A) try to be as useful as possible to the economy. 
B) are only interested in maximizing their earnings. 
C) are assumed to buy useful things before they buy luxuries. 
D) are only interested in acquiring material wealth. 
E) are assumed to do what they think will most increase their satisfaction. 
A) try to be as useful as possible to the economy. 
B) are only interested in maximizing their earnings. 
C) are assumed to buy useful things before they buy luxuries. 
D) are only interested in acquiring material wealth. 
E) are assumed to do what they think will most increase their satisfaction.

Question 4

Federal individual income taxes illustrate the ability-to-pay principle of taxation.

Accepted Answer

A) True 
 B)False

Question 5

You own stock worth an estimated $1 million in the LPL Corporation.In addition,you have personal assets worth another $2 million.LPL becomes insolvent,with debts exceeding assets by $15 million.Your personal wealth will decline by:

Accepted Answer

A) $0. 
B) $1 million. 
C) $1.5 million. 
D) $3 million. 
E) your proportion of the total outstanding stock shares times $15 million. 
A) $0. 
B) $1 million. 
C) $1.5 million. 
D) $3 million. 
E) your proportion of the total outstanding stock shares times $15 million.

Question 6

Rationality in the household decision-making process means that:

Accepted Answer

A) all households make the same decisions. 
B) everyone in the household agrees on all decisions. 
C) households act in their own best interests. 
D) households want to earn as much income as possible. 
E) all households would make the same decisions given the same information on product quality and prices. 
A) all households make the same decisions. 
B) everyone in the household agrees on all decisions. 
C) households act in their own best interests. 
D) households want to earn as much income as possible. 
E) all households would make the same decisions given the same information on product quality and prices.

Question 7

If real wage decreases,the opportunity cost of working in the home will:

Accepted Answer

A) increase. 
B) decrease. 
C) not be affected. 
D) increase as long as worker productivity also rises. 
E) increase only if households want to maintain their standard of living. 
A) increase. 
B) decrease. 
C) not be affected. 
D) increase as long as worker productivity also rises. 
E) increase only if households want to maintain their standard of living.

Question 8

You are more likely to hire a plumber to repair a leaky drainpipe:

Accepted Answer

A) as the tax rate on your earned income rises. 
B) if you already own the specialized tools required to complete the plumbing repair work. 
C) following an increase in the opportunity cost of your time. 
D) the more knowledge and experience in plumbing repair work you possess. 
E) as the transaction cost of entering into a plumbing contract increases due to government regulations. 
A) as the tax rate on your earned income rises. 
B) if you already own the specialized tools required to complete the plumbing repair work. 
C) following an increase in the opportunity cost of your time. 
D) the more knowledge and experience in plumbing repair work you possess. 
E) as the transaction cost of entering into a plumbing contract increases due to government regulations.

Question 9

Most economists assume that the goal of elected officials is to promote the public interest.

Accepted Answer

A) True 
 B)False

Question 10

Gasoline taxes illustrate the benefits-received principle of taxation.

Accepted Answer

A) True 
 B)False

Question 11

Imposing a tax on an activity that generates an external benefit will cause participants in the activity to increase the amount of the activity undertaken.

Accepted Answer

A) True 
 B)False

Question 12

The second largest source of tax revenue for the federal government is:

Accepted Answer

A) payroll taxes. 
B) the personal income tax. 
C) the corporate income tax. 
D) excise taxes. 
E) the sales tax. 
A) payroll taxes. 
B) the personal income tax. 
C) the corporate income tax. 
D) excise taxes. 
E) the sales tax.

Question 13

A cooperative,or co-op for short,is a single-owner firm.

Accepted Answer

A) True 
 B)False

Question 14

The following table shows tax payments made for various incomes.According to the information in the table below,the tax system is:
Table 3.1
?
?
$$\begin{array} { | l | r | r | r | r | } 
\hline \text { Taxable income } & \$ 1,000 & \$ 2,000 & \$ 4,000 & \$ 8,000 \
\hline \text { Tax payments } & \$ 10 & \$ 30 & \$ 90 & \$ 270 \
\hline
\end{array}$$

Accepted Answer

A) progressive throughout all levels of income. 
B) progressive between $1,000 and $2,000 of income but regressive above $2,000. 
C) regressive throughout all levels of income. 
D) regressive between $1,000 and $2,000 of income but progressive above $2,000. 
E) proportional throughout all levels of income. 
A) progressive throughout all levels of income. 
B) progressive between $1,000 and $2,000 of income but regressive above $2,000. 
C) regressive throughout all levels of income. 
D) regressive between $1,000 and $2,000 of income but progressive above $2,000. 
E) proportional throughout all levels of income.

Household production consists of households producing goods and services,like meals,cleaning and child care,instead of firms.

Taxes collected on the basis of the benefits-received principle:

The statement "Households maximize utility" means that households:

Federal individual income taxes illustrate the ability-to-pay principle of taxation.

You own stock worth an estimated $1 million in the LPL Corporation.In addition,you have personal assets worth another $2 million.LPL becomes insolvent,with debts exceeding assets by $15 million.Your personal wealth will decline by:

Rationality in the household decision-making process means that:

If real wage decreases,the opportunity cost of working in the home will:

You are more likely to hire a plumber to repair a leaky drainpipe:

Most economists assume that the goal of elected officials is to promote the public interest.

Gasoline taxes illustrate the benefits-received principle of taxation.

Imposing a tax on an activity that generates an external benefit will cause participants in the activity to increase the amount of the activity undertaken.

The second largest source of tax revenue for the federal government is:

A cooperative,or co-op for short,is a single-owner firm.

The following table shows tax payments made for various incomes.According to the information in the table below,the tax system is: Table 3.1 ? ? Taxable income \ 1,000 \ 2,000 \ 4,000 \ 8,000 Tax payments \ 10 \ 30 \ 90 \ 270

The Art and Science of Economic Analysis

Some Tools of Economic Analysis

Demand, Supply, and Markets

Introduction to Macroeconomics

Tracking the U S Economy

Unemployment and Inflation

Us Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

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Exam 3: Economic Decision Makers

Household production consists of households producing goods and services,like meals,cleaning and child care,instead of firms.

Taxes collected on the basis of the benefits-received principle:

The statement "Households maximize utility" means that households:

Federal individual income taxes illustrate the ability-to-pay principle of taxation.

You own stock worth an estimated $1 million in the LPL Corporation.In addition,you have personal assets worth another $2 million.LPL becomes insolvent,with debts exceeding assets by $15 million.Your personal wealth will decline by:

Rationality in the household decision-making process means that:

If real wage decreases,the opportunity cost of working in the home will:

You are more likely to hire a plumber to repair a leaky drainpipe:

Most economists assume that the goal of elected officials is to promote the public interest.

Gasoline taxes illustrate the benefits-received principle of taxation.

Imposing a tax on an activity that generates an external benefit will cause participants in the activity to increase the amount of the activity undertaken.

The second largest source of tax revenue for the federal government is:

A cooperative,or co-op for short,is a single-owner firm.

The following table shows tax payments made for various incomes.According to the information in the table below,the tax system is: Table 3.1 ? ? Taxable income \ 1,000 \ 2,000 \ 4,000 \ 8,000 Tax payments \ 10 \ 30 \ 90 \ 270

The Art and Science of Economic Analysis

Some Tools of Economic Analysis

Demand, Supply, and Markets

Introduction to Macroeconomics

Tracking the U S Economy

Unemployment and Inflation

Us Productivity and Growth

Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

The Policy Debate: Active or Passive

International Trade

International Finance

Economic Development

Filters